Tag Archives: etf

What Do Twitter And Zynga Earnings Mean For Social Media ETF?

The Global X Social Media Index ETF (NASDAQ: SOCL ) is going through a rough patch. The ongoing tech rout, mainly instigated by overvaluation concerns amid broad-based gloom and a weak guidance issued by LinkedIn Corporation (NYSE: LNKD ) , was already there to punish the fund (read: LinkedIn Crashes: Should You Connect with Social Media ETF? ). Then, fresh woes emanated from the fourth-quarter earnings results from social networking site Twitter (NYSE: TWTR ) and social game developer Zynga (NASDAQ: ZNGA ) will likely compel investors to stay away from the social media ETF in the near term. Twitter’s Q4 in Detail The company’s fourth-quarter 2015 loss per share (excluding the stock-based compensation expense) of $0.07 was narrower than the Zacks Consensus Estimate of $0.13 loss per share. Including the stock-based compensation expense, the company posted a loss of $0.13 per share on a GAAP basis. This was narrower than the year-ago loss of $0.20 per share. The company’s non-GAAP earnings (excluding the stock-based compensation expense) were $0.16 per share, up 33.3% year over year. Revenues of $710.5 million in the quarter missed the Zacks Consensus Estimate of $718 million. Revenues were up 48.3% from the year-ago period. Absent the impact of negative currency translation, revenues grew 53%. The company finished the quarter with an average 320 million monthly active users (MAU). This indicated no change quarter over quarter and 9% year-over-year expansion. Although this is the first quarter that Twitter has seen no user growth sequentially, investors clearly could not digest the fact. The blow came in the form of guidance as well. Twitter anticipates total revenue between $595 million and $610 million for the first quarter of 2016, way below the Zacks Consensus Estimate which was pegged at $630 million prior to the release. Market Impact The soft MAU metric, an earnings miss and soft revenue guidance dampened investors’ mood as the stock tumbled 3% after hours. Year to date, the stock is down 35.3%. In the last one year, the stock has plunged about 70%. Twitter has a Zacks Rank #3 (Hold), which is subject to change post earnings release. The stock is a good growth and momentum play with a Zacks Style Score of ‘A’, but it lacks the value quotient as indicated by the score of ‘F’. There is a high chance that Twitter will decline in the coming trading sessions, especially given the ongoing correction in the online and social media space. Zynga’s Q4 in Detail GAAP loss per share (excluding the stock-based compensation expense) of $0.02 cents was narrower than the Zacks Consensus Estimate of $0.04 cents loss per share. Including the charges, GAAP loss was $0.5 per share, same as the year-ago quarter. Zynga’s revenues of $185.8 million beat the Zacks Consensus Estimate of $177 million. Zynga also failed to live up of analysts’ projection as it expects first-quarter 2016 revenues in the range of $160-$175 million, below the Zacks Consensus Estimate of $177 million. Market Impact Zynga also saw a landslide in its shares after hours with a 10.8% plunge. Year to date, the stock is down 20.5%. Though the stock currently has a Zacks Rank #3, it looks like that the rank is due for a downgrade. The stock is a decent momentum play with a Zacks Style Score of ‘A’, but its value and growth scores are not optimistic. Social Media ETF in Focus Notably, Twitter does not have a sizable exposure in the overall ETF world, with SOCL holding just 2.7% share in it. However, the company’s results are crucial to the entire social media sector. Plus, a freefall in the shares of Zynga – which accounts for about 3% of SOCL – will make matters worse. However, SOCL has strong long-term fundamentals and carries a Zacks ETF Rank #2 (Buy). So, investors having a strong gut for risks can play this dip. SOCL is down 19.3% so far this year (see all technology ETFs here). Link to the original post on Zacks.com

Is DXJR The Best ETF To Play Japan Now?

Late last week, Bank of Japan’s (BOJ) move to impose a negative interest rate for the first time in its history took the markets by surprise. Global economic woes – the decline in crude oil prices and weak data from emerging and other export-based countries including China – led to the move. The BOJ’s step helps the third-largest country in the world to get closer to its target inflation rate of 2%. It is an effort to boost confidence and spending by companies and households. The BOJ Governor Haruhiko Kuroda has stated that there is no limit to efforts for easing monetary policy. The central bank may further expand asset purchases if required. Sub-zero interest rate measures are nothing new. Last year, the European Central Bank (ECB) had cut down interest rates to negative to lower borrowing costs, encourage bank lending and combat deflation. Denmark, Sweden and Switzerland adopted a similar measure in the past. Meanwhile, the ECB has hinted on further policy easing in its March 2016 meeting. It is expected that the ECB may further cut interest rates in response to persistently low inflation and volatility in the financial markets. The ECB president Mario Draghi identified turbulence in global markets along with plummeting oil prices as a contributing cause for Eurozone’s low inflation. Real Estate Stands to Benefit Interest rates have a profound effect on credit availability and cost of real estate mortgages. A low interest rate environment improves an individual’s ability to purchase properties by reducing the cost of mortgage capital, thereby boosting demand. A favorable consumer spending scenario and strong recovery plan could play an important role in boosting the housing market. Given this, investors may take advantage by investing in real estate ETFs based in Japan such as the WisdomTree Japan Hedged Real Estate ETF (NYSEARCA: DXJR ) . The fund tracks the performance of the WisdomTree Japan Hedged Real Estate Index, thereby providing exposure to the Japanese Real Estate sector. The fund also hedges exposure to fluctuations between the U.S. dollar and the yen. Thus, this ETF appears to be a strong bet at a time of significant foreign exchange fluctuation. The ETF charges 48 bps in fees and gained 6.2% in the last 5 days (as of February 3, 2016). The fund currently has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook, suggesting that it will outperform the broad market funds in the coming months. Original Post

The Psychology Of Losing Streaks And How To Overcome Them

By Maria Meramveliotaki-Simon In trading, consecutive losses are very common and some traders do not take it at heart. Instead, they try to make the best out of it, learn, adjust their strategy or money management plan if needed and just get on with it. It is not always that easy, however, to have this attitude. It is not unlikely, if you ever had a number of consecutive losing trades, to have thought that you are an incompetent trader or that you are possibly not fitted for live trading. You may have experienced anxiety, disappointment and anger at yourself or anyone else that is involved (such as your broker or the market). This is a natural human reaction that has a chemical basis; a losing streak activates the production of cortisol, our body’s stress hormone. While cortisol’s primary function is to prepare our body to cope with danger by increasing glucose, the prolonged exposure to it that comes in tandem with losing streaks will render us anxious or even sad. Anxiety and sadness will then work as “containers” for negative thinking. Suddenly, we see the world through those black glasses and we may engage in various unhelpful thoughts: ” I am a loser”, ” I will never make it”, “Should have never traded”. But what happens as you think in this manner? Your anxiety, disappointment and anger increases and with them comes a lot of confusion, feeling scattered, unsure, lacking in confidence and belief. There are some typical ineffective behaviours that traders may then fall into such as Overtrade to reduce losses Revenge trade to get back at the market Become extremely risk averse and trade too small or not trade at all Give up and close trading account Escaping The Vicious Cycle Of Losing Streaks If you do engage in some of the ineffective behaviours mentioned above, it is likely that you will end up trapping yourself in a vicious cycle. This is because risky trading behaviors such as overtrading or revenge trading are likely to make you lose again and, therefore, evoke the same unpleasant emotions and unhelpful thoughts that led you to it. Click to enlarge In order to exit the vicious cycle of losing streak psychology: 1. Become aware of the emotions that have emerged. Ask yourself: What am I feeling? Am I disappointed? Anxious? Am I Angry? 2. Understand the thinking pattern that accompanies these emotions. What is your mind telling you? Is it pulling you down, sabotaging you or maybe intimidating you? Typical thoughts following a losing streak would be: I am a lousy trader. Should have given up long time ago My strategy must be wrong; I have been wrong all the way I cannot afford to just let it be. I must make back the money I lost It is just embarrassing to have lost more than half of my balance 3. Are you about to make trading decisions according to what you are feeling or thinking? Is this the best way to trade? Has this helped you to succeed in the past? 4. You can choose to break the cycle. Having unhelpful thoughts and emotions is very different from acting on them . Remember that if you act on them, you maintain the vicious cycle. Instead of acting on your thoughts, keep your purpose in mind and act according to your goals: Examine if there are aspects of your strategy & methodology that need to be changed. You may opt to do so by going back trading on a demo for a while. But while demo can provide you with valuable insights about your strategy, it cannot simulate real market conditions; your psychology is going to be completely different when you trade live. Take a look at your risk/reward ratio. Are your stop losses too narrow or too wide? It often takes the time to determine the best ratio and you may have to be wrong before you get it right. When you trade, focus entirely on the present moment. Your mind may attempt to remind you of the past, or scare you with negative future possibilities. You must learn not to buy into it, because if you do, you will end up back in the vicious cycle. Your focus must be what’s happening in the market now. Keep educating yourself on trading. You could attend webinars, read online tutorials or join relevant forums. Exercise patience. You may be in the right way to achieve your trading goals and it could be that it just hasn’t happened yet. Be patient, have belief and don’t buy into negative self-talk. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.